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Planned euro bonds get ‘BBB’ rating

Global credit watchdog S&P Global Ratings said Thursday it granted an investment-grade, or “BBB” score, to the Philippine government’s planned euro bonds issuance this year.

“S&P today assigned its ‘BBB’ long-term foreign currency rating to the proposed benchmark-size euro-denominated senior unsecured notes to be issued by the Philippines [BBB/Positive/A-2],” it said in a statement.

It said the notes “represent direct, general, unconditional, unsecured and unsubordinated obligations of the sovereign and rank equally with the sovereign’s other unsecured and unsubordinated debt obligations.”

Finance Secretary Carlos Dominguez III
Finance Secretary Carlos Dominguez III said in a message to reporters Thursday the details of the issuance such as the size, tenor and timeline would be disclosed once the Philippine finance team finalized them “after receiving investor feedback during roadshow.”

National Treasurer Rosalia de Leon said Wednesday the government was planning a “benchmark” euro bonds issuance, meaning the offer size would be at least $500 million.

Reports from capital markets publication Refinitiv IFR said the government already hired banks to arrange investor meetings in Europe for the planned bond issuance.

Deutsche Bank and UBS were tapped as joint global coordinators and were bookrunners with BNP Paribas, Credit Suisse and Standard Chartered.

The report further said investor meetings would be conducted in key cities in Europe such as Zurich in Switzerland, London in Great Britain, Paris in France, Frankfurt in Germany and Milan in Italy beginning April 26 to promote the issuance.

The planned euro bonds’ issuance forms part of the government’s efforts to raise funds for the P3.7-trillion national budget this year. The government is also eyeing to raise $893.3 million or 6 billion yuan this year through Panda bonds in China.

The Philippines successfully returned to the Samurai bond market in August 2018 with the issuance of a multi-tranche JPY154.2 billion ($1.39 billion) Samurai bonds.

The Bureau of the Treasury said the offering marked “the return of the Republic to the Samurai market after an 8-year break and the first time in almost 20 years that it has issued Samurai bonds on a stand-alone basis.”

The Philippines currently enjoys investment grade ratings from S&P Global Ratings, Fitch Ratings and Moody’s Investors Service.

Topics: S&P Global Ratings , euro bonds , investment-grade , “BBB” score
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